The International: Hollywood Fact vs. Fiction

The International features bankers as villains, but do their evil schemes make any sense?

Sony Pictures' The International, starring Clive Owen, tries to establish a new kind of villain: An international bank that uses its position as middleman in international arms deals to-well, it's not all that clear what they want to achieve with all of their scheming. Filmmakers based their antagonists on the infamous Bank of Credit and Commerce International, founded in Pakistan in 1972. The BCCI stretched across 78 countries, including the United States, and was brought down in 1991 when its myriad crooked deals, including money laundering, bribes and back-rolling arms trafficking, were exposed by U.S. and British regulators. The BCCI was involved with crooked regimes like Manuel Noriega's Panama and Saddam Hussein's Iraq.

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But The International's evil bank is presented as the face of global capitalism run rampant rather than a malignant institution that hides within a complex international system. The pull of this bank over governments and criminal elements is far-reaching, and we are assured bluntly that the bank "controls everything." So what are the bad guys up to, and how does their scheme --selling arms to African countries to saddle them with debt--compare to reality?

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War Profiteer Bankers--What Are They Good For?

The evil bank's plan is to serve as the exclusive broker to funnel small arms from China to African nations in order to foster conflict. The only weapons deal they mention, around which the entire movie revolves, doesn't involve small arms at all--the weapons are Silkworm antiship missiles which, in reality, are not high on the list of most African nations' military needs.

The movie does get one key point correct: China is busy selling weapons to African nations, and blocking sanctions on the regimes that receive them, such as the Sudan. China is also spearheading infrastructure projects like dams, power plants and factories in Africa. These operations support mineral and oil exports, and therein lies the motive: China is very interested in establishing cheap and reliable shipments of African natural resources.

When it comes to the way China does business, however, the movie is off by decades. Today, the nation has plenty of banking prowess, and invites Western investors into their businesses, even though it entails more transparency. In short, they don't need a broker to set up arms or any other deals, and if they do it's through banks in Hong Kong or Macau that are owned by sympathetic Chinese expatriates.

But in the 1980s, before it adopted Western-style banking, China used BCCI as a middleman to sell its Silkworm missiles to Iran, Iraq and Saudi Arabia. The International takes that whole scheme and transfers it to Africa. (Screenwriter Eric Singer could have based the plot on this old article from Time magazine.) The bank's relationship with China did not end well: BCCI lost $400 million when China seized its holdings after the 1991 collapse.

The movie goes out of its way to show bank employees seducing an African warlord with promises of "weapons, intel and logistics." Warlords and others on the far side of the law are exactly the kind of guys who accept help and later stick financial institutions with the unpaid bill. Take, for example, BCCI and Panama. The Senate report on the BCCI noted that the bank secured loans for arms deals for Noriega, but he defaulted with nary an apology. "BCCI chose to swallow the losses, which amounted to $10 million in all, rather than irritate Noriega by pushing forward with attempts at recovery," the report says. Third World revolutionaries do not make for safe investment partners.

Helping totalitarian nations flush with oil money, however, is another matter entirely. Such a scam surfaced early this year. Iran has, with bankers' help, been profiting from international business deals in direct defiance of U.N. Security Council sanctions. In January, British-based Lloyd's of London admitted that it had, for years, received money from Iran's Central Bank and removed any reference to the source of the money, a process called "stripping." (Click here for the New York District Attorney's announcement. ) The bank also cleaned the trail of money destined for the Sudan. The scheme unraveled when bank employees blew the whistle--and no hired killers were on hand to silence them, as in The International.

A Plot Point From the Headlines of an Old Newspaper

The International's plotters say that by promoting war, the bank will create a demand for weapons that the African nations can't afford. "This is not about making profits from weapons sales," explains one character. "It's about controlling the debt that the conflict produces É If you control the debt, you control everything." It's a line ripped from the headlines of newspapers printed in the early 1990s.

In fact, when you control the debt, you risk being burned by default. The famed economist John Maynard Keynes once quipped, "If you owe your bank a hundred pounds, you have a problem. But if you owe your bank a million pounds, it has." This wisdom applies to government debt, as well.

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Generally, governments are good entities to loan money to because they can repay over a long period of time. Between the 1970s and the 1990s banks loaned the Third World lots of money--not for weapons, but for development projects, according to the International Monetary Fund. Over the years the dollar increased in value and interest rates soared, making these debts harder for struggling nations to repay. They now owe so much they can't pay for much of anything else.

That's why, these days, bankers buy parts of the enormous debt borne by developed nations--like the United States or countries in the European Union--which have a better chance of paying it off, with interest. "Now the attention (of government debt-purchasers) has switched from the developing to the developed world," The Economist noted in an article last month. The International's scheme to prey on Africa seems dated. If the plan was aimed at, say, Ireland, the economics might make a little more sense.

There are those who say that the Chinese project in Africa is saddling those nations with debt that will later be used as leverage for sweetheart oil and mining deals. China is Africa's main lender. Then again, China has forgiven large chunks of African debt in the past. If the movie posited Chinese banks as the bad guys, it may not have been accurate, but at least it would have been timely.

Instead, The International's marketing team is trying to position the movie as a relevant take on current financial crises. "The mess we're in now started when the banks took advantage of people and encouraged them to live way beyond their means," director Tom Tykwer says. He doesn't mention laws passed by Congress that opened the door to irresponsible lending and restricted regulatory oversight, government-backed Fannie Mae's dive into securities backed only by shaky mortgages or the Federal Reserve's bungled handling of interest rates, to name just a few other culprits.

All told, the plot of The International seems geared to stoke paranoia about the global economy and to appeal to people who feel the unwanted weight of their personal credit card debts. Banks are not in control of creating debt--the responsibility lies primarily with the debtors who made the choice to spend. If there's a conspiracy ruining our financial lives, it starts with your own wallet, not some sleek building in Luxembourg.